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2019 (8) TMI 1862 - AT - Income Tax
TP Adjustment - non-granting of working capital adjustment - HELD THAT:- As relying on Emptoris Technologies India (P.) Ltd [2015 (10) TMI 738 - ITAT PUNE] DRP/TPO/AO should be directed to grant working capital adjustments in the hands of the comparable to bring the same to the level of the assessee and the same is required while benchmarking the international transactions entered into by the assessee. The finding of the CIT(A) is not correct when he stated that the figures are based on presumptions - Decided in favour of assessee.
Manner of quantification of adjustments - restricting to the value of international transactions only and not to the all transactions at the entity level - HELD THAT:- As decided in M/s. Hyundai Construction Equipment India Pvt. Ltd case [2019 (4) TMI 1286 - ITAT PUNE] as relying on the Jurisdictional High Court judgement in the case of CIT vs. Firestone International (P.) Ltd [2015 (6) TMI 1123 - BOMBAY HIGH COURT] asserted that the TP adjustments are to computed not considering the entity level sales. Rather it should be done ideally considering the relatable sales drawing the quantitative relationship to the imports from the AEs, i.e. controlled cost. The principle of relevant here proportionality is and it is a settled law in this regard. In the situation like the one in the instant case of the assessee, there is data relating to controlled and uncontrolled cost particulars. This undisputed data is suffice to arrive the proportionate sales relatable to the international transaction with the AEs ie controlled cost. Also we direct the AO to restrict the adjustments, if any only to the international transaction with AE - Decided against revenue.